Arbitration award reversed due to "misconduct" where arbitrator makes adverse credibility determination upon party's use of an interpreter
The California Court of Appeal for the Fourth District, Division One, has overturned an award in a contractual arbitration proceeding because it was based, at least in part, upon an improper determination a witness was not credible. (KMI v. Grove Pham (October 17, 2023) D080801.) Writing for a unanimous majority, Justice Dato overturned the order of the Hon. Daniel A. Ottalia, Judge Presiding, of the Riverside County Superior Court. The trial court had confirmed the petition of plaintiff FCM to confirm the arbitration award in its favor over the objections of defendant Grove Pham. Grove argued the arbitrator committed misconduct when she made a determination plaintiff and witness Phuong Pham was not credible.
Despite the general rule that an appellate court defers to an arbitrator's findings as to credibility, the Fourth District found the arbitrator had improperly discounted Mrs. Pham's testimony:
In the arbitrator’s view, although the transaction “was rather complicated,” her decision in the case was “made easier by an evaluation of the credibility of the witnesses.” ...
The arbitrator did not find Phuong or Trish credible. In explaining why, she highlighted as the key example Phuong’s use of an interpreter:
“Among the items that stand out, is Mrs. Pham’s use of an interpreter. While the Arbitrator understands that people for whom English is a second language frequently prefer to testify in their native language in important legal matters, Mrs. Pham’s use of an interpreter appeared to the Arbitrator to be a ploy to appear less sophisticated than she really is. She has been in the country for decades, has engaged in sophisticated business transactions and has functioned as an interpreter." (Id., p 5.)
The appellate court found this finding rose to the level of "bias" against Pham, given the fact there was little evidence to support it. For example, the court of appeal noted that immigrant communities may include "thriving" businesses run by persons who speak English only as a second language, and the fact that Mrs. Pham requested an interpreter did not indicate her testimony was less credible. The court further noted that the facts plead indicated Mrs. Pham had used her daughter as an interpreter during the subject business dealings.
The Fourth District thus held the record showed arbitrator "bias" and such bias is included in the definition of "misconduct." Consequently, the rights of the plaintiff were prejudiced, and such misconduct resulting in prejudice is one of the narrow grounds for overturning an arbitration award under California's Code of Civil Procedure section 1286.2(a)(3).
